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Time to Add some Corn to Your Diet.
I have been waiting for a substantial dip in the grains to add to a position in corn, and it is clear from the chart below that we are just not getting it. While the US crop seems to be in good condition, with 70% rated “good/excellent”, the global picture continues to move from bad to worse.
In just a few days, torrential rains wiped out Pakistan’s entire crop for the year, which historically has been a regional net supplier, and they have destroyed much of the storage as well. Russia and the Ukraine have completely withdrawn from the export market, husbanding what meager harvests they can now expect to feed their own people, forcing several international suppliers to declare a force majeur on their contracts. It’s looking like Canada can expect an early winter, as frosts have already appeared in some of the northernmost fields. Cold, dry weather is also forcing major supplier, Argentina, to pare back forecasts.
I caught a double in wheat a few months ago (click here for “Going Back into the Ags” at http://www.madhedgefundtrader.com/june-24-2010.html ) during its parabolic move from $4/bushel to $8 and quickly cashed out at the top (click here for “My Best Trade of the Year” at http://www.madhedgefundtrader.com/august-10-2010.html ). It is still rich at $7.40. Corn has been a laggard, up only 25% from its May low, and clearly looks like it has broken out to the upside. It also offers individuals a new, easily tradable, liquid ETF (CORN).
Mother Nature is not the only factor boosting grain prices. There is a ton of cash sitting on the sidelines because so many investors are afraid of an Autumn stock market crash, and are loathe to buy the top of the greatest bond bubble in history. Given the strong fundamentals (click here for “The Bull Market in Food is Only Just Starting” at http://www.madhedgefundtrader.com/august-10-2010-2.html ) and the historically low prices, the grains look pretty good right now on a risk/reward basis in the global scheme of things.
And if the trade doesn’t work out, you can always take delivery and eat your long. It’s great for the digestion. Believe me, I know!
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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Monsanto Corn? That stuff is garbage. Only the prospect of subsidized biofuels is keeping it propped up. Even still, using food for fuel is a terrible utilization of sugars in iomass.
Just closed out my long position. Was long from about 3.50 on Dec 10.Speculators are running this one and I think it may be ending.
http://ispeakofpeak.blogspot.com/2010/09/closed-corn-long-positionprepar...
www.marketskeptics.com has been following this for a while.
He has an interesting theory; that it will be a shortfall in agricultural commodities that will force foreign central banks to stop hoarding UST's & start buying said commodities.
Coupled with an enormous 'short position' in agricultural commodity futures, will lead to a vicious short squeeze & USD crisis. At least I think that's what he is saying.
It's true that foreign holdings of UST's are rising exponentially i.e. the backstop bid for the USD & that agricultural commodities in general are rising in 'price'.
Yes the price supression manipulaton of the USDA is undeniable
Just another crisis within the perfrect storm crisis designed to have the useless idiots begging for a world government
Take delivery? Of 5000 bushels? Where do it put it?
Just read that global corn in storage is only a 60-day supply for the entire world! This, despite what is expected this year to be a new record crop for the U.S., and despite a hot summer that reduced yields. I've been long corn since it hit limit up late June. I've added to my position twice.
Nice summer!
Will you then speculate in the breadstuffs of the people?
i love adding corn to my diet. i charcoal grill my corn on a cob, it is so easy. you keep it in the silk husks and it just smokes with flavor. also popcorn. i found the most awesome wire mesh popcorn popper. just took it over to my popcorn young homey at the farmer market. he is his girl loved it. they have blue, red, white and mix of L O C A L L Y grown corn. farmer's rock around here. they really are the hero's of the today. especially real corn farmers, not ethanol growing corn farmers.
http://www.worthpoint.com/worthopedia/vintage-wire-mesh-popcorn-popper
Madhedgefundtrader,
You are hurting your marketing with your stock phrase:
« ... conventional wisdom mercilessly flailed and tortured daily ... »
That phrase is too ugly ... too American ... your sadistic 'joking' about torture and tearing people's skin off their bodies. But we know those CIA people are your friends.
Yet you would get more hits with less of such stuff.
"Time To Add Some Corn To Your Diet"
GMO corn, perfect for fattening up your livestock, fast!
whether it's your bovine, or human herd, working as intended. . .
So true.
Via Infowars:
http://www.huffingtonpost.com/2010/01/12/monsantos-gmo-corn-linked_n_420...
Whole kernal corn is a pretty useless veggie to humans. Does add color and texture to the waste product tho.
hey H A R D w o o d, you are probably right. cause i just realized squirrels don't like poop corn.
No thanks. I'll stick to the local non-GMO corn. I find it better to be short local than long GMO with two heads on your shoulders, both nonfunctional.
Great stuff! Wish I were a trader -- NOT.
My idea of agriculture is adding some new heirloom seed varieties to my stash.
+1 full root cellar. It's one small yearly investment that provides exponential return.
Take physical delivery. Repost of the same old stuff...
http://www.thereadystore.com/food-storage/saratoga-farms-hard-red-winter-wheat-valuebucket
http://countrylivinggrainmills.com/ (Don't forget to order the power bar)
? Don't Worry about Restocking — Saratoga Farms Hard Red Winter Wheat has a 30 year shelf-life.
? Choose Natural Food over Preservatives — the only ingredient in here is hard red winter wheat!
? Stay Healthy in an Emergency —wheat flour is the base of most meals and has vital nutrients.
? Guard Against Emergencies — staying stocked up on flour will ensure that you will always have something to work with even if other foods go bad.
? Simplify Your Life — a dependable container can be stored most anywhere and will not take up any space.
? Pick the Healthiest Food Available — red winter wheat has a higher gluten and protein level than regular wheat, so you can have the best food storage has to offer!
? Save Time and Money —six-gallon bucket saves you from running to the store if you ever run out of wheat.
? Follow the Food Pyramid to Feel Your Best —it provides an essential contribution to your daily supply of grains and rice.
? Have Food Storage with Variety — versatile hard wheat can be ground up and used as a flour or used otherwise.
? Make Your Food Storage Exciting — great for the base of creative cooking. Make all kinds of meals with other supplies like chicken, beans, even fruits like peaches, and much more!
MHFT, do you have an opinion or analysis on SUGAR? (ETF SGG)
You would be chasing right now, but look for a bullish flag or something to get in. If you spread, beware of the possible contango situation developing on the further dated contracts. But I'm no pro, so someone else might be able to give you a better assesment!
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Thanks for your reflections on sugar. I got in a few months back. Now up about 44% on recent parabolic spike this last week. So far contango does not seem to be an issue, but wise thought of you to mention monitoring this. Stop limit order in a few percent below my open profit. This is one of my few long term profitable trades. I typically day trade, but I had a conviction on this, and it turned out.
Take a look at the front month contracts in 2011, i got my ass kicked on a spread because of it, now I'm just trying to get back in after having a great time with sugar in 2009. Good luck!
hey sugar, you want to met velobabe, M E†
I had kind of surmized that a few weeks back. Pleasure to make your acquaintance.